SCRA Foreclosure Protection Relapses to 90 days – UPDATED

UPDATED

On March 31, President Obama signed into law the “Foreclosure Relief and Extension of Servicemembers Act of 2015,” extending the sunset date to December 31, 2017.  Credit union’s SCRA Notices should (again) reflect one-year, rather than 90 days.

The Service Members Civil Relief Act provides protection for service members from foreclosure for a period of time after the end of a service member’s military service. In 2010, the foreclosure protection time period was extended to one year.  The one-year period relapsed back to 90 days as of December 31, 2015.

Currently, there are bills in both the House and Senate to reinstate the one-year protection period, but nothing has been passed and sent for the President’s signature.

HUD’s SCRA Notices reflect the one-year protection period, but should currently, and probably temporarily, reflect 90 days.

The SCRA states that in a legal action to enforce a debt against real estate that is filed during, or within one year after the servicemember’s military service, a court may stop the proceedings for a period of time, or adjust the debt. In addition, the sale, foreclosure, or seizure of real estate shall not be valid if it occurs during or within one year after the servicemember’s military service unless the creditor has obtained a valid court order approving the sale, foreclosure, or seizure of the real estate.

Credit unions may want to create an addendum to the notice, or produce a limited number of corrected notices to use until proposed legislation is passed.